As this Reuters article ( http://us.rd.yahoo.com/finance/external/reuters/SIG=11vg30000/*http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh83084_2004-09-15_12-57-01_l15630565_newsml ) notes, Apple's prices are lower than Napster and other services in the UK. Why are they picking on Apple, then?

A new Porsche Boxter in the UK costs 42,000 Pounds. That is roughly 77,000 US Dollars. While a new Boxter in the UK starts at about 42,000 US Dollars. Talk about fair...
Whatever. This is nothing new. Boxter in Germany, about 45,000 EURO. Still, huge difference.

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jimothy wrote:
As this Reuters article ( http://us.rd.yahoo.com/finance/external/reuters/SIG=11vg30000/*http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh83084_2004-09-15_12-57-01_l15630565_newsml ) notes, Apple's prices are lower than Napster and other services in the UK. Why are they picking on Apple, then?

Because Apple's product is actually being used.

Apple's pricing is lower that existing competitors. If they went a lot lower then the competitors would be crying anti-competitive behavior designed to run them out of business and establish a monopoly.

Why is it that CA is complaining when Apple is lowering the standard costs for downloading music in the UK? Have they filed complaints against other on-line music stores in the past? Are the competitors with the same or higher prices included in this complaint? Does someone at CA own stock in Real?

Looks like a load of crap to me, designed to get in the public eye and get more funding or increase donations.

So you guys would be fine if Apple charge California residents more for iTunes songs than Nevada residents because demand is higher there?

Even if iTunes is cheaper than other stores I can see their point. They've worked out the EU so that Europe can have a market more like ours in the U.S. Of course they'll get antsy when people charge one member differently from the others.

If it somehow cost more to deliver a product to France than to England then it would make sense to charge differently. But Apple's saying that it's just because iTunes is more popular in England...that's why they're charging more.

They should just do it that other way around...charge all of Europe the higher price, then give the French an extended "France Discount" because demand is low there. Then I bet the English wouldn't have a case anymore.

I'm inclined to agree with SWC on this one. Pricing should be the same throughout, without fail (taking exchange rates into account, mind you).

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AFCdtLoeb wrote:
I'm inclined to agree with SWC on this one. Pricing should be the same throughout, without fail (taking exchange rates into account, mind you).

Thanks. And I DO understand that there are many, MANY reasons why Apple might have to charge different places different rates.

The record companies in country X want 2% more money than county Y? Fine, diffent rate. Bandwidth costs more in country Z? Fine, different rate.

I don't oppose charging differently...it's just that I don't think "demand is higher there" is a good enough reason. PARTICULARLY if the countries are both neighbors. I WOULD support charing more where demand is higher if the countries are drasticly different. They are under no obligation to charge England and India the same prices because those markets and populations are very different.

But just like all US states are getting treated the same, all EU members should be treated the same.

Why the %$#% are they charging France in Euros and England in Pounds? If the whole idea of the Euro is to create this single economy then the national currency should be done away with, at least a little at a time. Therefore any newly created international business should have to charge/use Euros and not the national currency. By mixing the currencys and trying to stay "fair" they are asking for trouble.

-zip

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Small White Car wrote:
So you guys would be fine if Apple charge California residents more for iTunes songs than Nevada residents because demand is higher there?

Even if iTunes is cheaper than other stores I can see their point. They've worked out the EU so that Europe can have a market more like ours in the U.S. Of course they'll get antsy when people charge one member differently from the others.

If it somehow cost more to deliver a product to France than to England then it would make sense to charge differently. But Apple's saying that it's just because iTunes is more popular in England...that's why they're charging more.

They should just do it that other way around...charge all of Europe the higher price, then give the French an extended "France Discount" because demand is low there. Then I bet the English wouldn't have a case anymore.

Actually, I would be fine with that. After all, this is how it works in a free market. As the demand increases, so too should the price. it is competition with other services that keeps this function in check. Mind you, this is USUALLY only applied to tangible goods or services rather than intellectual property that is not in "short supply". I see no problem with Apple's practice here. Charge a price for a product that is fair and competetive, that allows you to make a profit, and let the market forces work. In the end, everyone benefits. If the market in the UK wouldn't bear this price, then Apple would be forced to lower it due to other competing services. It's Economics 101.

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Guest wrote:
Why the %$#% are they charging France in Euros and England in Pounds? If the whole idea of the Euro is to create this single economy then the national currency should be done away with, at least a little at a time. Therefore any newly created international business should have to charge/use Euros and not the national currency. By mixing the currencys and trying to stay "fair" they are asking for trouble.

Heh heh. Yup.

This is all the Brit's fault, though. They want to join the EU...sort of. They're participating...sort of.

Keeping the pound is one of the things they're doing to keep from totally joining the EU. I dunno if this will change anytime soon. It WOULD clear up a lot of problems.

If we are still in a open and free economy, a company can choose to charge whatever it wants, whether that is higher or lower than it charges elsewhere. The customer can decide whether they want to pay for it or not. The company then has to deal with whether it gains or loses sales. Considering the complexity of licensing in Europe and the UK, there could very well be legitimate reasons for the price differential. The whole Euro-Market concept likely still has some bugs in it and this pricing issue could reflect that. I'm not suggesting that Apple gouge people, but as others have pointed out, have they compared prices to other on-line sources and complained about them as well? Apple is simply the biggest, most convient, and most visible target available; best guaranteed to bring notice to the complainee. Apple has what EVERYONE wants; elegance, ease of use, selection; and as such most people want to buy from them, but they still want the bargain. This is uncharted waters for everyone involved. Prior economic models may or may not stand up to the market conditions that are evolving. Everyone has a right to complain I suppose, and it may well be necessary to keep everyone else honest and the playing field level; maybe I'm just weary of seeing and hearing of people who constantly complain and gripe about every little thing. I guess I have spent too many years just grinning and bearing it.

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acdc1174 wrote:

I see no problem with Apple's practice here. Charge a price for a product that is fair and competetive, that allows you to make a profit, and let the market forces work.

Although I agree with this, I keep thinking how I would react if Apple started charging US states different amounts for songs.

No matter which way I think about it, I can't seem to support that idea. That's what's shaped my opinion on this EU thing. Just as the US states agreed to be a part of one country, the EU members have agreed to be a part of a larger entity. (I know they're not the same, but I don't feel qualified to say that the EU is different ENOUGH from the US to be treaed differently in this regard.)

Which is why I said I have no problem treating India or Japan differently than England. It's the fact that they're cooporating with the EU that makes me uneasy.

O'well, that's what lawyers are for. I'm sure they'll come up with their own solution no matter what the logic is.

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Small White Car wrote:
They should just do it that other way around...charge all of Europe the higher price, then give the French an extended "France Discount" because demand is low there. Then I bet the English wouldn't have a case anymore.

No, you're missing the point. They shouldn't charge more for either the UK or EU sites. They would just need to keep changing it because of FX rates.

Instead they should allow UK customers to access the French site, to buy songs that are common to both (presuming they don't have the rights to distribute certain songs in the UK they can in France and vice versa).

Clearly there are some issues to do with who gets the royalties, which may be the basis of Apple's commercial argument - that basically they get charged more by the record companies in the UK that the EU. The whole licensing issue is a mess anyway - hence why it took so long to bring iTunes to Europe and why it is not yet EU wide.

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So you guys would be fine if Apple charge California residents more for iTunes songs than Nevada residents because demand is higher there?

Why not? Everyone else does it. People in California are often paid more for the same work as people elsewhere in the country. The can of worms being opened up here isn't a pretty one, even if it is easy to deal with.

And the Brits didn't adopt the Euro. The general rul of thumb is that you can't have your cake and eat it too.

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jfbiii wrote:
Why not? Everyone else does it. People in California are often paid more for the same work as people elsewhere in the country.

But see, I'm not talking about what Apple can legally do. I'm betting they COULD do that. I'm talking about what people are going to put up with. As more and more people shop online, finding the best price anywhere will become second nature to people. They won't stand for being shut out of a better price just because of where they live.

I'm not saying you're wrong...just that people won't put up with it. How many ISPs do you know that still charge by the hour? There's nothing WRONG with doing that, but anyone who tries it now will find themselves bankrupt faster than you can blink.

Given that Apple is leading edge on just about everything else, I'd hate to see them fall behind what poeople want from a music store.

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jfbiii wrote:

And the Brits didn't adopt the Euro. The general rul of thumb is that you can't have your cake and eat it too.

That looks like the lesson of the day, huh? I agree.

Microsoft is starting it's engines and the BS for apple has just begun.
Keep your opponent on the defensive while you come in for the knockout.

As I've learned from life, things are seldom as they seem. But you need to know how the game is played before you can figure it out.


Booganosefunk

Once again, Steve has duped the poor iLemmings with his reality distortion field amd now they're paying through the nose for second rate audio when they could be paying the perfect pricing set by our friends in Redmond. Everyone (but the iLemmings) knows that WMP format is superier to everything else on the planet.

See, I'm right, and have always been. Check the facts:

http://www.winsupersite.com/reviews/wmp10.asp

RC,

Did you actually read that article all the way through ? ? ? ? ? ? ?

That is all I have to say.

Thanks...

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RealityCheek wrote:
Once again, Steve has duped the poor iLemmings with his reality distortion field amd now they're paying through the nose for second rate audio when they could be paying the perfect pricing set by our friends in Redmond. Everyone (but the iLemmings) knows that WMP format is superier to everything else on the planet.

See, I'm right, and have always been. Check the facts:

http://www.winsupersite.com/reviews/wmp10.asp

kinda funny. quoted from that article is: "With iTunes, sharing music just works. If I'm not mistaken, "it just works" is one of Microsoft's favorite terms. They might start practicing what they preach." lol even though microsoft created a new version of media player, it still can't compare to the simplicity of iTunes.

SWC, Apple could, in theory, force people to have diffrent rates based upon their state of residence (Ignoring the PR firestorm this would cause). It would be too easy though, for people to work around that.

Keep in mind, the differnet pricing between Brittan and French/Germany also has to do with the different licensing and distributors between the three countries.

If the EU want's Apple to price tracks/albums the same, they have to get a single EU-wide music licensing system setup so that Apple only has to deal with a single music distributor. That's why Apple isn't selling to all of Europe already... they have to make their deals in individual countrys.

That's also why they have to lock it to the user's address... different licensors for at least some of the music who don't have the rights to that music outside their country/region. It's not just the desire to just charge more to people in the UK (although any company takes local pricing into account).

It won't happen in the US between states, because most (all?) music distributors here distribute to the whole country.

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JimWCB wrote:
Keep in mind, the differnet pricing between Brittan and French/Germany also has to do with the different licensing and distributors between the three countries.

And if so, then that's great. That's all Apple has to say and this will go away!

Bloody typical.

In the UK we have to pay more for our cars, more for our CD's and more for our food than most EU member states - luckily our taxes are still a little lower (although thats rapidly changing). I don't see the Consumers Association campaigning about car prices, food prices etc etc.... It seems to me that I have to spend more on buying a car and more on food than I will ever spend on downloading music.

So what if the UK prices are a few pennies more. Exchange rate fluctuations between the Pound and the Euro can easily cover that.

How can any of you Britons afford music when you're buying gas at almost $5.51 a gallon! (Calculated at the WSJ petrol average of 81.9p/liter)

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AFCdtLoeb wrote:
How can any of you Britons afford music when you're buying gas at almost $5.51 a gallon! (Calculated at the WSJ petrol average of 81.9p/liter)

We're used to it... Hell, if things weren't so expensive here we'd be so rich....

We were expecting iTunes tracks to be Ј1.50 ($2.65 at current exchange rates) ish so 99p was a pleasant surprise....

Its alright. You guys make up for it with a phenomonal public transportation system. Especially Paris' METRO, which I was very pleased with when I traveled to Europe.

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AFCdtLoeb wrote:
Its alright. You guys make up for it with a phenomonal public transportation system. Especially Paris' METRO, which I was very pleased with when I traveled to Europe.

When you said "phenomonal public transportation system" I thought you were on a different planet, then you said Paris and I breathed a sigh of relief. Continental Europe enjoys a reasonably good system. The UK's is terrible...

Who's trying to dupe whom, nimrod.

"Let's see...I think I'll post some BS and then use my own site as "proof" that I was correct. Nobody here knows I'm really the RealityC*ck that everyone knows and loves..."

You hack.

Are there any other examples where UK consumers cannot buy from other European countries via an online web site?

Guys - widen your horizons a little. Learn a bit about the world outside of
the states.

EU Lesson - the EU is an economic union which, amongst other things, seeks
to ensure that member states (UK included, regardless of the adoption of the
Euro) are afforded comparable prices for goods throughout that community.

Apple breaks European law by discriminating against the UK by charging more for the same product. Comparisons to Napster etc. are irrelevant. What counts is Apples price for the product.

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Anonymous wrote:
Guys - widen your horizons a little. Learn a bit about the world outside of
the states.

EU Lesson - the EU is an economic union which, amongst other things, seeks
to ensure that member states (UK included, regardless of the adoption of the
Euro) are afforded comparable prices for goods throughout that community.

Not strictly true. The EU exists to try to create a trading area with lowered or non existent barriers to trade. It attempts to do this by trying to harmonise economic factors such as sales taxes, workers rights, interest rates and fiscal policy. It does not try to ensure prices are comparable across the EU, it assumes that what it does will eventually lead to that. One of the benefits of the Euro (and there are few, but thats a separate argument) is that prices become more transparent, i.e. if a German wants to buy some Metaxa brandy which in Germany costs, say, 20 Euros but in Greece costs only 5 Euros then he can make the decision to go to Greece or otherwise order the brandy from Greece at the lower cost.

This is where the argument of the price of tracks from iTunes becomes relevant in that British, French or German customers cannot go to a different source to acquire them. Its all very well saying that EU legislation doesn't allow for that kind of price difference, that same legislation, if properly applied would have created a level playing field for music downloads, i.e. a music company should not be allowed to have different licensing rights for music in different EU countries. It would be better to sort this out first, then the pricing can follow.

I was in Londan a few years ago and I had to put a pound into a toll phone to make a call. I'm betting it is much less to get a phone call started in Paris. Maybe they should sue the phone companies as well.

They should go after the record companies to setting song rates, not Apple.

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jimothy wrote:
Apple's prices are lower than Napster and other services in the UK. Why are they picking on Apple, then?

Probably becuase Napster doesn't yet operate in the rest of Europe so there is no proce discrepancies to compare against in this case. Not sure about the other services such as OD2 or anything like that.

Last time I checked I payed 7 bucks for a pack of smokes in Chicago but only 3.50 in Champaign, IL. I realize that I can buy them here OR Chicago, which is different than how the iTMS works. However, Apple has fought for low prices and I think that what they are giving is the lowest they can without losing money! I mean, the record labels want to charge more and more and Apple is holding their ground on lower prices. I think that for whatever reason they are charging more in the UK...it's probably a good one or it would be lower.

Involving the government in price controls is a bad idea. Have we learned nothing from the fall of the USSR? Government interference in the market place causes economic disaster. Central planning does not work! If the market will not tolerate the 120 euro cents price then apple will either drop the price or close up shop. Theses whining consumers are probably nothing more than a front group for Apple's competition eager to give apple the shaft to advance their own store by anti-competitive measures.

[quote="jfbiii"]

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And the Brits didn't adopt the Euro. The general rul of thumb is that you can't have your cake and eat it too.

It seems like all the US-based people on this topic don't really know that much about Europe, the EEC and the Euro. This is a complex topic and the UK has a number of very good reasons for not entering the Euro. If you look at the economic health of countries across Europe you will find that they are all in different states of health. But because of the constraints of a common currency they all have to have the same base interest rate. This rate cannot be right for all countries and this means that some countries are labouring with an inappropriate rate which has hobbled their economies, causing high unemployment and low GDP growth.

When you add to that the fact that certain countries (France and Germany to be precise) have run deficits beyond the limits which are permitted within the system, further perpetuating the problems, and have avoided paying any penalty for this, you can see that the whole system is broken. The EEC is comprised of different countries with different cultures, different histories and different economies. This is not the same as the USA so can't be directly compared.

Clearly there would be some benefits in the UK joining the Euro in terms of price transparency and so on, but good decisions are based on evaluating all the aspects, taking account of the negative aspects as well as the positive. When you look into the matter in the round I personally think that it is correct for the UK to have held back. Who knows how successful the Euro will be in the medium term, and the UK's economy is too important to us for it to be experimented with.

Onto the topic of the moment, however. There is no reason why the UK price for iTMS tracks should be any different from the Euro price. The exchange rate fluctuation has been within about 2% over the past six months, so that doesn't provide any excuse. I think the CA investigation is a very good thing, and I hope Apple do the decent thing quickly and change the prices without further ado.

What a hoot, reading what you guys across the pond think of us!

The UK is part of Europe but it is an island, so excuse us for having an island mentality. We are not part of the Euro because many of our population (and government) are still stuck in the 2nd World War and are scared to dump the pound as they see it as a French/German invasion. Meanwhile younger generations are not stuck in such a time warp.

Regarding the iTunes store... I can order CDs, DVDs etc from the French or German Amazon site and pay their local prices in Euros. I can even order goods from Amazon in the US and benefit from some great savings (I never been asked to pay any extra duty) even allowing for postal costs.

So why, in the supposedly one economic zone can I not buy and download music from a different page on the same site with the same credit/debit card? Because it suits Apple and because we in Great Britain meekly accept that we pay more for everything than our neighbours in Europe.

More power to the Consumers' Association!

Did anybody notice that the this comment that has gotten everybody up in arms was not posted by our favorite iTroll, RealityCheck, but by RealityCheek?

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RealityCheek wrote:
Once again, Steve has duped the poor iLemmings with his reality distortion field amd now they're paying through the nose for second rate audio when they could be paying the perfect pricing set by our friends in Redmond. Everyone (but the iLemmings) knows that WMP format is superier to everything else on the planet.

See, I'm right, and have always been. Check the facts:

http://www.winsupersite.com/reviews/wmp10.asp

sorry to interject. I work for Consumers' Association and helped write the complaint about iTunes - so I hope I can clear up some of the confusion about why and what for.

Why the complaint - essentially the issue is not just the pricce differential. This is a pain and is something that annoys everyone in the UK - but as has rightly been pointed out on the site you can often log onto sites elsewhere and import goods and pay in a different currency. The real problem here is that the price discrimination is enforced through the blocking of arbitrage. That is the key to it being a particular single market peoblem - one set of european consumers are being isolated from a different set of european consumers and charged a different - then stopped from getting around that restriction. So the complaint is not just abour price discrimination - but about the enforcement of that price discrimination through technical means.

On why iTunes and not others....simply because it would appear that iTunes has a dominant position in this market - and so is the biggest player. This potentially places greater legal obligations upon it not to price discriminate (and enforce it). It is also a lot easier to try and persuade the biggest player to shift and then the rest of the market will follow, than to pick off all the little guys one by one.

On why iTunes and not other sectors - I am crestfallen - I (and quite a few colleagues) spent about seven years fighting to get UK car prices down. The result - car prices (in real terms) are about 27% lower now than they were in 1998.

sorry it was a bit long - but thought it might be useful

phil evans

Thank you Phil. That was nice of you to take the time to explain that. So much of message boards is people just making stuff up, it's nice to get some comments that mean something from time to time.